To: Honorable Mayor and Members of Town Council
From: David L. Corliss, Town Manager
Trish Muller, Finance Director
Title
Resolution Approving the 2019-2021 Balanced Financial Plan
Body
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Executive Summary
Future planning is an essential part of the annual budget development process. Accordingly, a three-year balanced financial plan has been prepared for Town Council’s review. The framework for this initiative ties back to the Town’s numerous Council-adopted long-range plans which define levels of service and provide clear direction on priorities and projects.
The 2019-2021 Balanced Financial Plan demonstrates that the Town is in good financial condition and although not all departmental budget requests were able to be accommodated in this three-year plan, numerous requests to support level of service needs are included. All funds are balanced for all three years of the plan, meaning that funds available plus annual revenues exceed the total planned expenditures in all funds. All funds are also balanced from an operating perspective.
The Balanced Financial Plan does not include any tax rate increases. The Town’s sales tax rate remains consistent at 4 percent as does the property tax mill levy at 1.330. However, a system development fee and outdoor water rate increase are incorporated for Castle Rock Water for 2019 along with increases for green fees at Red Hawk Ridge, user fees for the Recreation Center and MAC, and an increase to Town development impact fees. Planning also includes an increase in healthcare cost for both the Town and its employees. The Balanced Financial Plan includes 15.75 additional FTEs in 2019. Future personnel planning includes accommodation of eight new FTEs in 2020 comprising four Castle Rock Water positions, one Fleet technician, a Parks asset manager, Police Training Officer, and an IT Systems Administrator; and, five new FTEs in 2021 consisting of four Castle Rock Water positions and one public works streets operator.
Overarching goals of the 2019-2021 Balanced Financial Plan include 1) addressing top-priority, though not all, level-of-service issues identified by staff; and 2) incorporating additional major priorities and projects in a responsible and conservative manner.
Discussion
2019 Budget Priorities
The 2019 Budget priorities used as the basis for development of the 2019 - 2021 Balanced Financial Plan can be summarized as follows:
• Ensuring outstanding public safety
• Enhance our transportation
• Secure our water future
• Maintain strong parks and recreation
• Support economic development
• Manage Town finances conservatively
Council has affirmed the above priorities and approach throughout the 2019 Budget process. These priorities are also supported in the 2017 community survey results as previously presented to Town Council.
Financial Overview
The 2019-2021 Balanced Financial Plan was developed using conservative and informed financial modeling and forecasting. Annual growth in sales tax revenue is included at 4 percent for 2019 - 2021. Residential growth is expected to continue to be strong over the three-year planning period and is budgeted at 600 single family units and 389 multi-family units in 2019; 700 single family units and 50 multi-family units in 2020; and 750 single-family units and 191 multifamily units in 2021.
Based on these revenue assumptions, the General Fund operating budget is balanced in each year from 2019-2021. This is with the inclusion of Town and employee medical and dental insurance premium increases for 2019-2021 along with departmental budget requests related to level of service needs. Several department requests were unable to be included into financial planning based on fiscal constraints in the projections.
Financial Details
The 2019-2021 Balanced Financial Plan (Exhibit 1) shows that the estimated costs of addressing top-priority, level-of-service needs and of implementing additional major priorities and projects can be accommodated in all operating funds using available resources. Included within the plan are 15.75 additional FTEs, six of which are in public safety, needed to address top-priority, level-of-service needs, along with needed increases in expenditures for equipment, technology and services. Following is a summary of the most significant items (generally, totaling $100,000 or more) in the plan for 2019, by fund and by department.
GENERAL FUND:
Police Department
• Addition of five personnel including a Patrol Officer - Co Responder, School Resource Officer (partially funded with costs planned to be shared with Douglas County), and two dispatchers totaling $383,588; additionally, the existing Crime Analyst contract position will transition a Town employee funded with existing budgeted amounts.
Fire Department
• An Addition of an Operations Assistant for $110,330
Division of Innovation and Technology
• Ongoing replacement of Cisco networking devices for $294,800
TRANSPORTATION FUND:
• Addition of two streets operators for additional snow plowing staffing needs for $152,151, including salary and benefits
• Craig and Gould Infrastructure for $800,000
• Transit Feasibility Study for $100,000
• Annual pavement maintenance program costs totaling $8,190,000, plus street reconstruction projects of $6,333,000
• Downtown Alley improvements for $100,000
• Traffic signal program costs of $550,000
ECONOMIC DEVELOPMENT FUND:
• Contribution for the Arapahoe Community College Collaboration Campus for $1,000,000
CASTLE ROCK WATER FUNDS (Combined):
• Water supply well projects totaling $4,413,007
• Water storage projects totaling $400,000
• Expenses of $925,000 for upgrades to the pumping and distribution system
• Rehabilitation and replacement of water lines for $725,000
• Water Treatment Plant upgrades and equipment for $150,000
• General Facility upgrades and replacements for $200,000 and design costs for Administration and Customer Service Building for $326,361
• Costs of $6,170,000 for continuation of the WISE project
• Chatfield reallocation project costs of $4,358,580
• Continuation of the Alternative Source of Supply project for $880,000
• Construction of the Plum Creek Diversion and well fields for $5,523,994
• Expansion of the Plum Creek Water Purification Facility totaling $14,000,000
• Newlin Gulch project for $5,455,300
• Stabilization of streams and minor drainage ways for $4,052,649
• Storm sewer improvements totaling $500,000 in the Young American subdivision
• Wastewater lift station upgrades for $217,000 and sewer line rehabilitation for $350,000
• Plum Creek Water Reclamation Authority expansion and projects totaling $18,978,309
• Addition of two new personnel, Water Plant Operator and SCADA Analyst, for $200,546
• Craig and Gould improvements and infrastructure for $318,108
• Pipeline and stream gage projects for $640,000
PARKS AND RECREATION CAPITAL FUND:
• Design costs for future park of $200,000
POLICE CAPITAL FUND:
• Two new vehicles for $118,000 related to the new Patrol Officer and School Resource Officer
TRANSPORTATION CAPITAL FUND:
• Plum Creek Parkway widening and roundabout for $4,667,500
• Crowfoot and Timber Canyon roundabout for $365,000
• Accumulation of funds for North Meadows Drive widening and for a future interchange at Crystal Valley Parkway for $750,000
• Wilcox and South street roundabout construction for $1,250,000
GENERAL LONG-TERM PLANNING FUND (TECHNOLOGY AND CAPITAL REPLACEMENT):
• Police Department building improvements for $290,000
• Facilities building transition for $100,000
• Parking lot maintenance for $278,322
• Fire equipment and extrication equipment for $325,000
DEVELOPMENT SERVICES FUND:
• One time update to the Town’s zoning code for $100,000
COMMUNITY CENTER FUND:
• Replacement of fitness equipment for $320,000
• Replacement of the Recreation Center’s HVAC system for $250,000
• Funding for the minimum wage increase for a total of $196,318
GOLF FUND:
• Parking lot improvements for $100,000
• Capital lease for replacement of the golf cart fleet for $470,513
FLEET FUND:
• Purchase of new and replacement vehicles for $2,272,971
Conclusion
The overarching goals of the 2019-2021 Balanced Financial Plan are to address top-priority, level-of-service issues and to incorporate additional major priorities and projects in a responsible and conservative manner. Based on projected revenues, not all departmental requests were able to be accommodated; however, the included items align with Council priorities and endeavor to maintain levels of service in the community. The 2019-2021 Balanced Financial Plan demonstrates that the ongoing initiatives set forth within the 2019 Budget are sustainable, and the one-time requests are able to be accommodated.
Staff Recommendation
Staff recommends that Council approve the 2019-2021 Balanced Financial Plan as presented.
Proposed Motion
“I move to approve Resolution No. 2018-__, A Resolution Approving the 2019-2021 Balanced Financial Plan.”
Attachments
Attachment A: Resolution
Exhibit 1: 2019-2021 Balanced Financial Plan